1. By way of these appeals, the assessee has called into question correctness of CIT(A)’s separate orders dated 30.8. 2010, in the matter of assessment under section 143(3) r.w.s. 147 of the Income tax Act, 1961, for the assessment years 2000-2001 and 2001-02, respectively. Since common grounds raised in both the appeals, they were heard together and are being disposed of by this common order for the sake of convenience.

2. The grievance common to both the appeals are as follows:

“1. The ld. CIT (A) erred in confirming the order passed by the AO u/s.147 of the I.T. Act, 1961.

2. The ld. CIT (A) in estimating the income at Rs.3,30,560 and the CIT (A) erred in accepting the method adopted by the AO.

3. The ld. CIT (A) erred in confirming the action of the AO in arriving at the income through consumption of electricity method which is not a recognized method for arriving at the income.

4. The ld. CIT (A) erred in estimating the production @ 2 kg per unit of electricity consumption and fixing the price at Rs.30 per kg and estimating the net profit @ 2 % which are all on the higher side.

3. To adjudicate on these appeals, only a few material facts need to be taken note of. The assessee is engaged in business of manufacturing steel wool. On the basis of information received from the Director, Vigilance (Income Tax) informing the Assessing Officer about theft of electricity by the assessee and some other persons, the assessments were reopened by the Assessing Officer. While the evidence of such information is not placed on record, as per the information obtained by the assessee under Right to Information Act, according to MSEB, there was no case of theft of electricity by the assessee during the period 1.4.1997 to 31.3.2001. While reopening the assessments, the AO was of the view that the logical inference about the theft of electricity by the assessee is that by doing so, the assessee has understated the production and sales commensurate with the theft of the energy. It was observed by the AO that “in view of these facts there is a reason to believe that the income chargeable to tax has escaped assessment and as such the case is being completed under section 143(3) r.w.s. 147 of the I.T. Act, 1961 in order to bring the escaped income to tax”. Interestingly, however, when the assessment was framed, it was on the basis of estimation of income, and in the process of so estimating the income, production was estimated on the basis of power consumption as per bills raised by Maharashtra State Electricity Board. In other words, the income was not estimated on the basis of alleged power theft but on the basis of consumption of power as per MSEB records. It is thus clear that even as the ground of reopening was understatement of production on account of theft of power, the assessment actually framed was on the basis of estimate of production in the light of power consumption according to the MSEB billing. The very reason for which the assessment was reopened did not actually being a role in estimating the income as finally assessed.

4. The short question which really is required to be adjudicated on the above facts is that when an assessment is reopened on a particular ground but during the course of assessment being finalized, no addition is made in respect of the ground on which assessment is reopened, can other additions be made in the course of such assessment proceedings. This question is in addition to the fundamental issue as to whether there was any material on record to indicate that the assessee had actually committed theft of electricity.

5. I have heard the rival contentions, perused the material on record and duly considered the factual matrix of the case.

6. I have noted that the fundamental basis for reopening the assessment was alleged theft of electricity but then as per information produced before me by the assessee, there was no case of theft of electricity against the assessee. The information has been obtained by the assessee under RTI and there is no material before me to controvert the information so obtained by the assessee. It would, therefore, appear that the very foundation of the impugned reassessment proceedings is devoid of legally sustainable merits. That apart, while the assessment is reopened on the ground that there was theft of electricity and thus production was understated, in the assessment proceedings, no addition has been made on this account. As a matter of fact, the basis of estimation as adopted in the assessment proceedings is the consumption of power as per records maintained by MSEB. The base figure therefore for estimating the production is the electricity purchased by the assessee from MSEB and not the electricity said to have been stolen by the assessee from MESB. It is well settled law that when additions are not made in respect of the ground for which reassessment is resorted to, no other additions can be made in the course of such reassessment proceedings. If needed, authority contains in CIT v. Atalas cycles, 180 ITR 319(P&H). The same view is now accepted by the Hon’ble Jurisdictional High Court in the case of CIT vs. Jet Airways, 195 Taxman 117, wherein, Their Lordships have observed that if after issuing a notice under section 148, the AO accepts contention of the assessee and holds that income, for which he had initially formed a reason to believe that it had escaped assessment, has, as a matter of fact, not escaped assessment, it is not open to him to independently assessee some other income. If the AO intends to do so, according to Their Lordships, a fresh notice under section 148 would be necessary, legality of which would be tested in event of a challenge by assessee. In view of these observations of the Hon’ble Jurisdictional High Court it follows that when the very ground on which the reopening is resorted to is abandoned during the course of assessment proceedings; it cannot clearly be open to the AO to resort to other additions. In view of these discussions, in my considered view the impugned reassessment order is devoid of any legally sustainable merits. I, accordingly, uphold the grievance of the assessee and direct the AO to delete the impugned additions made in the course of reassessment proceedings.

7. In view of the fact that I have decided the assessment on the basis of above legal grounds, it is not necessary to adjudicate other grounds raised by the assessee. These grievances, under the present set of facts, are academic and do not call for any adjudication.